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Royalties clause: Copy, customize, and use instantly

Introduction

A royalties clause outlines the terms under which royalties will be paid, typically for the use or licensing of intellectual property. This clause is crucial in licensing agreements, franchise agreements, and any contract where one party is paid for the right to use their property, such as patents, copyrights, trademarks, or other intellectual assets. The clause sets out the royalty rate, payment structure, and conditions under which royalties will be paid.

Below are templates for royalties clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Royalties clause for fixed percentage rate

This variation applies when royalties are based on a fixed percentage rate.

The parties agree that the royalty payments shall be calculated as [insert percentage] percent of the gross revenue generated from the use or sale of the licensed intellectual property. The royalty payments shall be made quarterly and due within [insert number of days] days after the end of each calendar quarter.

Royalties clause for minimum royalty payments

This variation applies when minimum royalty payments are specified.

The parties agree that the licensee shall pay a minimum royalty of [insert amount] per year, regardless of the actual sales or revenue generated from the licensed intellectual property. If the royalties due exceed the minimum amount, the licensee shall pay the higher amount in accordance with the royalty calculation method.

Royalties clause for tiered royalty rates

This variation applies when royalty rates are tiered based on revenue.

The parties agree that the royalty rate shall vary depending on the gross revenue generated from the use or sale of the licensed intellectual property, as follows:[insert percentage]% on revenue up to [insert amount][insert percentage]% on revenue between [insert amount] and [insert amount][insert percentage]% on revenue exceeding [insert amount]

Royalties clause for per-unit royalty

This variation applies when royalties are based on a fixed amount per unit sold.

The parties agree that the licensee shall pay a royalty of [insert amount] per unit sold or distributed under the terms of this Agreement. The royalty payments shall be made on a monthly basis, with payment due within [insert number of days] days after the end of each month.

Royalties clause for advance payments

This variation applies when advance royalty payments are required.

The licensee agrees to pay an advance royalty of [insert amount] upon execution of this Agreement. The advance will be credited against future royalty payments and is refundable only if the Agreement is terminated due to a breach by the licensor.

Royalties clause for periodic royalty reports

This variation applies when periodic royalty reports are required.

The licensee agrees to provide the licensor with detailed royalty reports every [insert period, e.g., quarter or year], which will include the total revenue generated from the sale or use of the licensed intellectual property and the corresponding royalty payments due. The reports will be due within [insert number of days] days after the end of each reporting period.

Royalties clause for lump sum payment

This variation applies when royalties are paid as a lump sum.

The parties agree that the licensee shall pay a lump sum royalty of [insert amount] upon execution of this Agreement. No further royalty payments will be due unless additional uses or sales of the licensed intellectual property occur, in which case additional payments will be agreed upon separately.

Royalties clause for international royalties

This variation applies when royalties are calculated for international sales.

The parties agree that royalties for sales of the licensed intellectual property in international markets will be calculated at the same rate as domestic royalties, except for the inclusion of applicable local taxes, duties, or fees, which will be deducted from the gross revenue before calculating the royalty payment.

Royalties clause for gross vs. net revenue

This variation applies when royalties are based on gross revenue versus net revenue.

The parties agree that the royalties will be calculated based on the net revenue generated from the sale of products incorporating the licensed intellectual property. Net revenue is defined as the gross revenue minus any discounts, returns, or taxes directly attributable to the sale.

Royalties clause for sublicensing

This variation applies when royalties from sublicensing are addressed.

The licensee agrees to pay the licensor a royalty of [insert percentage]% of any fees or royalties received from sublicensing the licensed intellectual property to third parties. The royalty payments for sublicensing shall be made quarterly and are subject to the same reporting requirements as direct royalties.

Royalties clause for delayed royalty payments

This variation applies when delayed royalty payments are addressed.

If any royalty payment is not made on time, the licensee agrees to pay interest on the overdue amount at the rate of [insert percentage]% per annum, calculated from the due date until the date of payment. The licensor may also suspend the licensee’s rights under this Agreement until all overdue royalties are paid.

Royalties clause for audit rights

This variation applies when the licensor has the right to audit royalty payments.

The licensor reserves the right to audit the licensee’s books and records related to the sale or use of the licensed intellectual property to verify the accuracy of royalty payments. Such audits shall be conducted at reasonable intervals and at the licensor’s expense, unless discrepancies are found, in which case the licensee will bear the cost of the audit.

Royalties clause for cumulative royalties

This variation applies when royalties accumulate over time.

The parties agree that the royalties under this Agreement shall accumulate and be carried forward to subsequent periods. If the royalties for any given period do not meet the agreed minimum threshold, the shortfall will be added to the royalties due in the next payment period.

Royalties clause for non-refundable royalties

This variation applies when royalties are non-refundable.

The parties agree that all royalty payments made under this Agreement, including any advance payments, are non-refundable. No portion of the royalties will be returned to the licensee, even if the Agreement is terminated early or if sales of the licensed intellectual property fall below expected levels.

Royalties clause for royalty payment schedule

This variation applies when a specific payment schedule is outlined.

The licensee agrees to pay royalties to the licensor on a monthly basis, with payments due on the [insert date] of each month. The royalty payment will be based on the sales made in the previous month, and the licensee will provide a report detailing the sales and corresponding royalty amount.

Royalties clause for royalty caps

This variation applies when a cap is set on royalties.

The parties agree that the total royalty payments under this Agreement shall not exceed [insert amount] over the term of the Agreement, regardless of the revenue generated from the licensed intellectual property. Once this cap is reached, no further royalties will be owed unless agreed upon in a new Agreement.

Royalties clause for exclusive rights

This variation applies when exclusive rights are granted.

The parties agree that the license granted under this Agreement is exclusive, and the licensee will pay royalties at a rate of [insert percentage]% of gross revenue derived from the exclusive use of the intellectual property. The royalties will be paid on a quarterly basis, with payment due within [insert number of days] days after the end of each quarter.

This variation applies when revenue sharing is part of the agreement.

The parties agree to share the revenue generated from the use of the licensed intellectual property, with the licensor receiving [insert percentage]% of the total revenue and the licensee retaining [insert percentage]%. Payments will be made on a quarterly basis, within [insert number of days] days of the end of each quarter.

Royalties clause for payment method

This variation applies when the payment method is specified.

The parties agree that royalty payments will be made by wire transfer to the account designated by the licensor. The licensee will provide all necessary banking details to facilitate timely payments. Any other payment methods will be subject to prior written agreement by both parties.

Royalties clause for upfront payments

This variation applies when upfront royalty payments are required.

The licensee agrees to make an upfront royalty payment of [insert amount] upon signing this Agreement. This amount will be credited against future royalty payments but is non-refundable unless the Agreement is terminated due to a breach by the licensor.

Royalties clause for annual royalties

This variation applies when royalties are paid annually.

The parties agree that the royalty payment for the licensed intellectual property will be calculated annually based on the gross revenue from the sale or use of the licensed property during the previous year. The licensee shall pay the royalties to the licensor within [insert number of days] days of the end of each calendar year.

Royalties clause for lump sum royalty payments

This variation applies when a lump sum royalty payment is agreed upon.

The licensee agrees to pay a lump sum royalty of [insert amount] as full and final compensation for the use of the licensed intellectual property during the term of this Agreement. No further royalty payments will be due unless specified in a separate agreement.

Royalties clause for adjusted royalty rates

This variation applies when royalty rates are subject to adjustments.

The parties agree that the royalty rate may be adjusted annually based on changes in inflation, market conditions, or other relevant factors. The adjusted royalty rate will be determined by mutual agreement and will be reflected in an amendment to this Agreement.

Royalties clause for royalties from sublicenses

This variation applies when royalties from sublicenses are addressed.

The licensee agrees to pay the licensor a royalty of [insert percentage]% of any income received from sublicensing the licensed intellectual property to third parties. The licensee will provide a report of all sublicensing income, and royalty payments will be made quarterly.

Royalties clause for payment in kind

This variation applies when royalties are paid in kind.

Instead of monetary payments, the licensee agrees to pay royalties in the form of goods or services of equal value to the agreed royalty amount. The nature and value of the goods or services will be mutually agreed upon by both parties in writing.

Royalties clause for royalty rate adjustments based on performance

This variation applies when royalty rates are based on performance metrics.

The parties agree that the royalty rate shall be adjusted based on the performance of the licensed product. If the sales exceed [insert amount], the royalty rate will increase to [insert percentage]%. If sales fall below [insert amount], the royalty rate will decrease to [insert percentage]%.

Royalties clause for quarterly royalty reporting

This variation applies when quarterly reporting of royalties is required.

The licensee agrees to provide a quarterly report detailing the revenue generated from the use of the licensed intellectual property and the corresponding royalty payments due. These reports will be due within [insert number of days] days after the end of each calendar quarter.

Royalties clause for delayed payment penalties

This variation applies when penalties for late payments are specified.

The licensee agrees to pay a late fee of [insert percentage]% per month for any royalty payment that is more than [insert number of days] days overdue. The fee will be calculated on the total amount due and will accrue from the due date until the payment is received.

Royalties clause for no royalty obligation in case of non-use

This variation applies when royalties are contingent on the use of intellectual property.

The parties agree that no royalty payments will be due if the licensee does not use the licensed intellectual property during the term of this Agreement. If the licensee fails to make any sales or derive any income from the intellectual property, no royalties will be owed for that period.

Royalties clause for detailed royalty statements

This variation applies when detailed royalty statements are required.

The licensee agrees to provide the licensor with detailed royalty statements, including a breakdown of all sales, returns, and deductions that affect the royalty calculations. These statements will be provided on a monthly basis and must be submitted within [insert number of days] days after the end of each month.

Royalties clause for tiered royalty system

This variation applies when a tiered royalty system is used.

The royalty rate will be tiered based on the gross revenue generated from the sale of the licensed intellectual property. The royalty rate will be [insert percentage]% for sales up to [insert amount], [insert percentage]% for sales between [insert amount] and [insert amount], and [insert percentage]% for sales exceeding [insert amount].

Royalties clause for gross revenue-based royalty calculation

This variation applies when royalties are calculated based on gross revenue.

The royalties under this Agreement shall be calculated as [insert percentage]% of the gross revenue generated from the sale or licensing of the products incorporating the licensed intellectual property. Gross revenue is defined as total sales revenue before any deductions for taxes, shipping, or returns.

Royalties clause for record-keeping and audit rights

This variation applies when record-keeping and audit rights are specified.

The licensee agrees to maintain accurate and complete records of all sales and income derived from the licensed intellectual property. The licensor reserves the right to audit these records at any time during the term of this Agreement to verify royalty payments.

Royalties clause for shared revenue

This variation applies when revenue is shared between parties.

The parties agree to share the revenue generated from the sale or use of the licensed intellectual property, with the licensor receiving [insert percentage]% and the licensee receiving [insert percentage]%. This revenue sharing agreement is based on the net proceeds from sales, after deducting any necessary expenses.

Royalties clause for sublicensing royalties

This variation applies when sublicensing royalties are addressed separately.

The licensee agrees to pay the licensor [insert percentage]% of any fees or royalties received from sublicensing the licensed intellectual property to third parties. The licensee will provide a report of all sublicensing agreements, and royalties will be due within [insert number of days] days of receipt.

Royalties clause for royalty reviews and adjustments

This variation applies when royalty rates are subject to review and adjustment.

The parties agree to review the royalty rate annually and make adjustments if necessary, based on factors such as market conditions, sales performance, and industry standards. Any adjustments will be mutually agreed upon and documented in writing.

Royalties clause for sublicensed products

This variation applies when royalties are calculated for sublicensed products.

The parties agree that the licensee shall pay a royalty of [insert percentage]% for any products developed or sold by a sublicensed party using the licensed intellectual property. The licensee shall provide a report of all sublicensing income and royalties due to the licensor quarterly.

Royalties clause for capped royalty payments

This variation applies when royalty payments are capped.

The parties agree that the total royalties payable under this Agreement shall not exceed [insert amount] over the term of the Agreement. Once this cap is reached, no further royalties will be owed, unless the Agreement is renewed or renegotiated.

Royalties clause for royalty payments based on net sales

This variation applies when royalties are based on net sales.

The parties agree that royalties will be calculated based on the net sales revenue generated from the licensed intellectual property. Net sales are defined as the total amount received by the licensee from customers, minus any discounts, returns, taxes, and shipping fees.

Royalties clause for early termination of the agreement

This variation applies when royalties are addressed in case of early termination.

In the event of early termination of this Agreement by either party, the licensee agrees to pay any outstanding royalties owed up to the date of termination. Royalties for any future sales after termination will not be owed, unless otherwise agreed upon in writing.

Royalties clause for royalties on sublicensing agreements

This variation applies when royalties are specified for sublicensing agreements.

The licensee agrees to pay the licensor [insert percentage]% of all fees or royalties received from sublicensing the intellectual property to third parties. The licensee will provide a full report on all sublicensing agreements, including income received and royalties due, on a quarterly basis.

Royalties clause for royalty payments on a pro-rata basis

This variation applies when royalties are paid on a pro-rata basis.

The parties agree that the royalty payments will be made on a pro-rata basis, according to the percentage of the total sales generated by the use of the intellectual property. If the intellectual property is used in multiple products, royalties will be allocated based on the proportion of sales attributable to the specific product incorporating the licensed property.

Royalties clause for annual lump-sum payments

This variation applies when royalties are paid as a lump-sum annually.

The licensee agrees to pay an annual lump-sum royalty of [insert amount] due at the beginning of each year. This payment shall cover all royalties owed for the use of the licensed intellectual property during the year, with no additional royalties owed unless explicitly agreed upon in writing.

Royalties clause for royalty payments in multiple installments

This variation applies when royalties are paid in installments.

The licensee agrees to pay royalties in [insert number] installments, with the first installment due within [insert number of days] days of the execution of this Agreement. Subsequent installments will be due on the [insert day] of each month/quarter, with payments based on the revenue generated from the intellectual property during the previous period.

Royalties clause for royalty payments after the expiration of intellectual property

This variation applies when royalties are due after the expiration of intellectual property rights.

The parties agree that royalty payments will continue to be due for any sales of products incorporating the intellectual property after the expiration of the intellectual property rights, but only for sales that occurred during the term of the Agreement. Payments will be made based on the agreed royalty rate, calculated on the sales made while the intellectual property was valid.

Royalties clause for advance royalty payments

This variation applies when an advance royalty payment is required.

The licensee agrees to pay an advance royalty of [insert amount] upon the execution of this Agreement. This advance will be applied toward future royalty payments. If the actual royalties owed exceed the advance, the licensee will pay the remaining amount in accordance with the payment terms outlined in the Agreement.

Royalties clause for performance-based royalties

This variation applies when royalties are based on performance metrics.

The parties agree that the royalty payments will be based on the performance of the licensed product. The royalty rate will increase or decrease based on specific performance milestones, such as sales volume or market penetration, as defined in Exhibit A.

Royalties clause for royalties on resale of licensed products

This variation applies when royalties are due on the resale of licensed products.

The licensee agrees to pay the licensor a royalty of [insert percentage]% of the resale price of any products incorporating the licensed intellectual property that are resold by third parties. This royalty will be calculated based on the final resale price after any discounts, returns, or allowances.

This variation applies when royalties are part of a revenue-sharing agreement.

The parties agree to share the revenue generated from the licensing of the intellectual property. The licensor will receive [insert percentage]% of the gross revenue, and the licensee will retain the remaining [insert percentage]% of the gross revenue generated from the licensed products or services.

Royalties clause for ongoing royalty payments

This variation applies when royalties are paid on an ongoing basis.

The parties agree that royalty payments will be made on an ongoing basis, due within [insert number of days] days following the end of each calendar quarter. These payments will be based on the gross revenue generated from the use of the licensed intellectual property during the preceding quarter.

This variation applies when royalties are due on related products.

The parties agree that royalties will be owed not only for products directly incorporating the licensed intellectual property, but also for any related products that incorporate or derive from the licensed intellectual property, including derivative works or modifications.

Royalties clause for royalties on international sales

This variation applies when royalties are due for international sales.

The parties agree that royalties for sales made outside of [insert country/region] will be calculated at the same rate as domestic royalties. However, any taxes, tariffs, or additional costs incurred for international sales will be deducted from the total gross revenue before calculating the royalty payment.

Royalties clause for payments based on net profit

This variation applies when royalties are calculated based on net profit.

The parties agree that royalties will be calculated as [insert percentage]% of the net profit generated from the sale or use of products incorporating the licensed intellectual property. Net profit is defined as the gross revenue minus all direct and related costs, including production, marketing, and distribution expenses.

Royalties clause for royalties based on unit sales

This variation applies when royalties are based on unit sales.

The parties agree that the royalty payments will be calculated based on the number of units sold that incorporate the licensed intellectual property. The licensee will pay a royalty of [insert amount] per unit sold, with payments due monthly based on unit sales in the previous month.

Royalties clause for royalties in foreign currency

This variation applies when royalties are paid in a foreign currency.

The parties agree that royalty payments will be made in [insert currency]. If the licensee generates revenue in a different currency, the licensee will convert the revenue to [insert currency] using the exchange rate on the date the payment is due. Any fees associated with currency conversion will be borne by the licensee.

Royalties clause for conditional royalty payments

This variation applies when royalties are conditional on specific criteria.

The parties agree that royalty payments will be contingent upon the licensee meeting specific sales or performance targets. If the licensee does not meet the agreed-upon criteria, the royalty payments may be reduced or withheld until the targets are achieved.

Royalties clause for payment frequency changes

This variation applies when the frequency of royalty payments can change.

The parties agree that the payment frequency for royalties can be adjusted based on sales performance. Initially, payments will be made quarterly, but if sales exceed [insert amount], the parties may agree to switch to monthly payments. Any change in frequency will be documented in writing.

Royalties clause for royalties on joint ventures

This variation applies when royalties are applicable to joint ventures.

The parties agree that if any joint ventures or partnerships are formed using the licensed intellectual property, the royalty payments from the joint venture or partnership will be split equally between the licensor and licensee, with each party receiving [insert percentage]% of the total royalties.

Royalties clause for tiered royalty structure

This variation applies when a tiered royalty structure is used.

The parties agree that the royalty rate will be based on a tiered structure, as follows:[insert percentage]% for sales up to [insert amount][insert percentage]% for sales between [insert amount] and [insert amount][insert percentage]% for sales exceeding [insert amount] Payments will be made on a quarterly basis, within [insert number of days] days of the end of each quarter.

Royalties clause for quarterly payments

This variation applies when royalties are due quarterly.

The licensee agrees to pay royalties quarterly, based on the revenue generated from the use of the licensed intellectual property during the previous quarter. Royalties will be due within [insert number of days] days following the end of each calendar quarter.

Royalties clause for royalties based on market price

This variation applies when royalties are calculated based on market price.

The parties agree that the royalties will be calculated based on the prevailing market price for similar products or services. The royalty rate will be [insert percentage]% of the market price at the time of sale, with payments due within [insert number of days] days of the sale.

Royalties clause for royalties on gross income

This variation applies when royalties are calculated on gross income.

The royalties under this Agreement will be based on the gross income derived from the sale of products incorporating the licensed intellectual property. The licensee will pay [insert percentage]% of gross income as royalty, with payments due annually.

Royalties clause for royalties on products with modifications

This variation applies when royalties are owed for products with modifications.

The parties agree that any products incorporating modifications or adaptations of the licensed intellectual property will be subject to the same royalty rate as the original licensed product. The royalty will be calculated based on the revenue generated from the modified product.

This variation applies when royalties are based on market share.

The parties agree that the royalty rate will be adjusted based on the market share of the licensed product in its relevant industry. The rate will increase if the market share surpasses [insert percentage]% and decrease if the market share drops below [insert percentage]%.

Royalties clause for payment of royalty by check

This variation applies when the royalty payment method is by check.

The parties agree that the royalty payments will be made by check, payable to [insert name], and sent to the address specified by the licensor. The licensee will ensure that payments are made on or before the due date specified in this Agreement.

Royalties clause for pro-rata distribution of royalties

This variation applies when royalties are distributed pro-rata.

In the event that the licensed intellectual property is used in multiple products, the royalties will be distributed pro-rata based on the relative sales of each product incorporating the intellectual property. The licensee will provide a report to the licensor detailing the sales distribution.

Royalties clause for payment based on net sales

This variation applies when royalties are calculated based on net sales.

The royalties shall be calculated based on the net sales of products that incorporate the licensed intellectual property. Net sales are defined as total sales revenue minus discounts, returns, and any applicable taxes or shipping costs. Royalties will be paid on a quarterly basis.

Royalties clause for minimum guaranteed royalties

This variation applies when a minimum royalty amount is guaranteed.

The licensee agrees to pay a minimum royalty of [insert amount] per year, regardless of actual sales or revenue generated. If actual royalties exceed the minimum amount, the licensee will pay the higher amount in accordance with the agreed royalty structure.

Royalties clause for royalty payments based on territory

This variation applies when royalties are based on geographic territory.

The parties agree that the royalty payments will vary depending on the territory in which the licensed intellectual property is used or sold. The licensor will receive [insert percentage]% of gross revenue from sales in [insert region/country], and a different percentage will apply for other territories.

Royalties clause for royalty audits

This variation applies when audits of royalty payments are allowed.

The parties agree that the licensor shall have the right to audit the licensee’s books, records, and financial statements related to the use of the licensed intellectual property. Audits will be conducted at the licensor’s expense, but the licensee shall bear the costs if the audit reveals underreporting or underpayment of royalties.

Royalties clause for licensing of multiple intellectual properties

This variation applies when multiple intellectual properties are licensed.

The parties agree that royalties will be calculated separately for each licensed intellectual property under this Agreement. The royalty rate and payment terms will be specified for each intellectual property, and the total royalty payment will be the sum of the individual payments.

Royalties clause for royalty payments on sales through online platforms

This variation applies when royalties are due on sales through online platforms.

The parties agree that the royalty payments will be calculated based on sales made through online platforms such as websites, e-commerce marketplaces, or mobile applications. The royalty rate will apply to the total revenue generated from these online sales, including any applicable fees or commissions charged by the platforms.

Royalties clause for royalties on sublicensed intellectual property

This variation applies when royalties are due for sublicensed intellectual property.

The licensee agrees to pay the licensor [insert percentage]% of any royalties or fees received from sublicensing the intellectual property to third parties. The licensee will submit a report detailing the income generated from sublicensing and pay the corresponding royalties on a quarterly basis.

Royalties clause for royalties on combined product offerings

This variation applies when royalties are due for combined product offerings.

The parties agree that if the licensed intellectual property is included in a bundled product offering with other products or services, the royalty payment will be calculated based on the combined sales price. The parties will agree on a fair allocation of the total price attributable to the licensed intellectual property.

Royalties clause for future royalties from derivative works

This variation applies when royalties are due from derivative works.

The parties agree that any derivative works, adaptations, or modifications created using the licensed intellectual property will be subject to the same royalty rate as the original work. Royalties will be calculated based on the revenue generated from the sale or licensing of the derivative works.

Royalties clause for royalties on import/export sales

This variation applies when royalties are due for import/export sales.

The parties agree that royalties will be owed on all sales of the licensed intellectual property, including sales made through the importation or exportation of goods incorporating the intellectual property. The royalty rate will be calculated on the sales revenue from these international transactions.

Royalties clause for royalty payments on software licenses

This variation applies when royalties are due on software licenses.

The licensee agrees to pay the licensor a royalty of [insert amount] per software license sold or distributed. The royalty payments will be made quarterly, based on the total number of licenses sold, with payments due within [insert number of days] days after the end of each quarter.

Royalties clause for royalties on content distribution

This variation applies when royalties are owed for content distribution.

The parties agree that the licensee will pay a royalty of [insert percentage]% for each unit of content distributed, whether through physical media, digital platforms, or any other distribution channels. Payment will be due within [insert number of days] days of distribution.

Royalties clause for royalties on long-term use

This variation applies when royalties are due for long-term use.

The parties agree that royalties will be paid for the use of the intellectual property throughout the term of this Agreement. If the use extends beyond the agreed term, royalties will continue to be paid at the same rate unless a new royalty rate is negotiated.

Royalties clause for royalties on digital downloads

This variation applies when royalties are due for digital downloads.

The licensee agrees to pay a royalty of [insert amount] per digital download or transaction for any products incorporating the licensed intellectual property. The payments will be made monthly, based on the total downloads during the preceding month.

Royalties clause for royalties on bundled services

This variation applies when royalties are due for bundled services.

The parties agree that royalties will be paid on all bundled offerings containing the licensed intellectual property. The royalty will be calculated based on the total sale price of the bundled package, with the licensee paying [insert percentage]% of the sale price as royalties.

Royalties clause for royalties on end-user sales

This variation applies when royalties are based on end-user sales.

The parties agree that royalties will be calculated based on the sale price of products incorporating the licensed intellectual property sold directly to the end user. The royalty will be [insert percentage]% of the total sale price, excluding shipping and taxes.

Royalties clause for royalties on use in advertising

This variation applies when royalties are owed for the use of intellectual property in advertising.

The parties agree that royalties will be paid for any use of the licensed intellectual property in advertising, marketing, or promotional materials. The royalty rate will be [insert percentage]% of the revenue generated from such advertising or promotional activities.

Royalties clause for royalties on cross-border sales

This variation applies when royalties are due for cross-border sales.

The parties agree that royalties will be calculated for sales of products incorporating the licensed intellectual property made across borders. The royalty will be calculated based on the local market price of the product in the region where the sale occurs, with payments due quarterly.

Royalties clause for royalties based on license type

This variation applies when royalties vary based on the type of license granted.

The parties agree that the royalty rate will differ depending on the type of license granted under this Agreement. For an exclusive license, the royalty will be [insert percentage]%, and for a non-exclusive license, the royalty will be [insert percentage]%. Payment will be made annually.

Royalties clause for royalties on resale of sublicensed products

This variation applies when royalties are owed on the resale of sublicensed products.

The parties agree that any resale of sublicensed products incorporating the licensed intellectual property will be subject to royalties. The licensee agrees to pay a royalty of [insert percentage]% of the resale price of any sublicensed product.

Royalties clause for royalties on product modifications

This variation applies when royalties are due for modified products.

The parties agree that the royalty payments will apply to both the original products and any modifications or variations of the licensed intellectual property. The royalty rate will remain the same for all modified products that incorporate the intellectual property.

Royalties clause for royalties based on gross profit

This variation applies when royalties are based on gross profit.

The parties agree that the royalties will be calculated based on the gross profit derived from the sale of products incorporating the licensed intellectual property. The royalty rate will be [insert percentage]% of the gross profit, and payments will be made quarterly.

Royalties clause for royalties on joint marketing efforts

This variation applies when royalties are owed from joint marketing efforts.

The parties agree that royalties will be paid for any marketing campaigns or efforts that promote both the licensed intellectual property and the licensee’s products. The royalty rate will be [insert percentage]% of the revenue generated from joint marketing activities.

Royalties clause for royalties for non-exclusive use

This variation applies when royalties are due for non-exclusive use.

The parties agree that the royalty rate for non-exclusive use of the intellectual property will be [insert percentage]%. The royalty payments will be due annually, based on the gross revenue generated by the licensee’s use of the intellectual property in the previous year.

Royalties clause for royalties on sales of replacement parts

This variation applies when royalties are due for sales of replacement parts.

The parties agree that royalties will be paid on sales of replacement parts or accessories that are used in conjunction with the licensed intellectual property. The royalty rate will be [insert percentage]% of the sale price of the replacement parts, with payments due monthly.

Royalties clause for royalties based on total units sold

This variation applies when royalties are based on the total number of units sold.

The parties agree that royalties will be paid based on the total number of units sold that incorporate the licensed intellectual property. The royalty will be calculated as [insert amount] per unit, with payments due on a quarterly basis.

Royalties clause for royalties based on net profit margin

This variation applies when royalties are based on net profit margin.

The parties agree that the royalty rate will be calculated based on the net profit margin derived from the sale of products incorporating the licensed intellectual property. The net profit margin is defined as the total revenue minus production and marketing costs.

Royalties clause for royalties on bundled product pricing

This variation applies when royalties are owed for bundled product pricing.

The parties agree that if the licensed intellectual property is included in a bundled product or service offering, the royalties will be calculated based on the total price of the bundle. The licensee will pay [insert percentage]% of the total bundled price as royalties.

Royalties clause for royalties for digital content licenses

This variation applies when royalties are owed for digital content licenses.

The parties agree that royalties for digital content licenses will be calculated based on the number of digital downloads or licenses sold. The royalty rate will be [insert amount] per download or license, and payments will be made monthly.

Royalties clause for royalty payments for licensing of trademarks

This variation applies when royalties are due for the licensing of trademarks.

The parties agree that the licensee will pay royalties based on the sale of products that use the licensed trademarks. The royalty rate will be [insert percentage]% of the net sales revenue generated from the sale of these branded products, with payments due quarterly.

Royalties clause for royalties on affiliate sales

This variation applies when royalties are owed for affiliate sales.

The parties agree that royalties will be paid for any affiliate sales made using the licensed intellectual property. The licensee will pay [insert percentage]% of the revenue generated from affiliate sales, with payments due on a quarterly basis.

Royalties clause for royalties on sponsorship deals

This variation applies when royalties are owed for sponsorship deals.

The parties agree that the licensee shall pay a royalty of [insert percentage]% for any sponsorship deals or advertising revenue generated through the use of the licensed intellectual property. Royalties will be paid annually.

Royalties clause for royalties based on geographical territories

This variation applies when royalties differ by geographical territory.

The parties agree that royalties for sales in different territories will be calculated separately. The royalty rate for sales in [insert region/country] will be [insert percentage]%, while the rate for sales in other regions will be [insert percentage]%. Payments will be made based on the total sales revenue from each territory.

Royalties clause for royalties based on licensing fees

This variation applies when royalties are based on licensing fees.

The parties agree that royalties will be calculated based on the licensing fees paid for the use of the licensed intellectual property. The licensee will pay [insert percentage]% of the total licensing fees received from sublicensing the intellectual property to third parties.

Royalties clause for royalties on software-as-a-service (SaaS) subscriptions

This variation applies when royalties are based on SaaS subscriptions.

The parties agree that royalties will be paid based on the revenue generated from subscriptions to the software-as-a-service platform that incorporates the licensed intellectual property. The royalty rate will be [insert percentage]% of the subscription fees, with payments due on a monthly basis.

Royalties clause for royalties on multi-channel sales

This variation applies when royalties are due for multi-channel sales.

The parties agree that royalties will be owed on all sales channels, including online, in-store, and via third-party platforms, as long as the intellectual property is used in the product. The royalty rate will be [insert percentage]% of the gross sales revenue from each channel, and payments will be made quarterly.

Royalties clause for royalties on sublicensed digital content

This variation applies when royalties are owed for sublicensed digital content.

The parties agree that the licensee will pay royalties on any sublicensed digital content that uses the licensed intellectual property. The royalty rate will be [insert percentage]% of the revenue generated from sublicensed digital content, with payments due within [insert number of days] days after receipt of payment.

Royalties clause for royalties on sales of co-branded products

This variation applies when royalties are due for co-branded products.

The parties agree that royalties will be owed for the sale of co-branded products that incorporate the licensed intellectual property. The royalty rate will be [insert percentage]% of the gross revenue generated from these co-branded products, and payments will be made quarterly.

Royalties clause for royalties on sale of derivatives

This variation applies when royalties are due for derivatives of the intellectual property.

The parties agree that the licensee will pay royalties for any derivative works created using the licensed intellectual property, including adaptations, translations, and other modifications. The royalty rate will be [insert percentage]% of the revenue generated from the sale or licensing of derivative works.

Royalties clause for royalties on sale of digital subscriptions

This variation applies when royalties are owed on digital subscriptions.

The parties agree that royalties will be based on the revenue generated from digital subscriptions that feature the licensed intellectual property. The royalty rate will be [insert percentage]% of the total subscription fees, with payments due on a quarterly basis.

Royalties clause for royalties on revenue from sponsored content

This variation applies when royalties are owed for revenue from sponsored content.

The parties agree that royalties will be paid based on revenue generated from sponsored content that uses the licensed intellectual property. The royalty rate will be [insert percentage]% of the total sponsorship fees, and payments will be due annually.

Royalties clause for royalties based on unit sales across multiple products

This variation applies when royalties are due based on sales across multiple products.

The parties agree that royalties will be paid for the sale of any product incorporating the licensed intellectual property, regardless of the specific product. The licensee will pay a royalty of [insert amount] per unit sold for each product, with payments due quarterly.

Royalties clause for royalties on international sublicenses

This variation applies when royalties are owed for international sublicenses.

The parties agree that royalties will be owed on any international sublicenses of the licensed intellectual property. The royalty rate will be [insert percentage]% of the fees received from international sublicensing agreements, with payments due annually.

Royalties clause for royalties on the sale of merchandise

This variation applies when royalties are due on merchandise sales.

The parties agree that royalties will be paid on the sale of merchandise incorporating the licensed intellectual property. The royalty rate will be [insert percentage]% of the gross revenue generated from the sale of such merchandise, with payments due quarterly.

Royalties clause for royalties on multi-year contracts

This variation applies when royalties are due for multi-year contracts.

The parties agree that royalties will be calculated based on the revenue generated from sales or licensing of the intellectual property over the course of the multi-year contract. The licensee will pay a fixed royalty of [insert amount] per year, with annual payments due within [insert number of days] days of each anniversary.

Royalties clause for royalties based on gross income from licensing

This variation applies when royalties are based on licensing gross income.

The parties agree that royalties will be calculated based on the gross income derived from licensing the intellectual property. The royalty rate will be [insert percentage]% of all gross licensing revenue, with payments due annually.

Royalties clause for royalties on online content distribution

This variation applies when royalties are owed for online content distribution.

The parties agree that royalties will be paid for the online distribution of the licensed intellectual property. The royalty rate will be [insert percentage]% of the revenue generated from online downloads, subscriptions, or other digital distribution methods. Payments will be made monthly.

Royalties clause for royalties on co-promotion agreements

This variation applies when royalties are due for co-promotion agreements.

The parties agree that royalties will be paid for any revenue generated from co-promotion activities involving the licensed intellectual property. The royalty rate will be [insert percentage]% of the total income generated from such co-promotion, with payments due quarterly.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Last updated 13 Feb 2025